Powell Industries Inc (POWL)

Liquidity ratios

Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019
Current ratio 1.81 1.76 1.62 1.58 1.57 1.63 1.72 1.91 1.99 2.25 2.35 2.55 2.50 2.71 2.50 2.45 2.19 2.05 2.31 2.15
Quick ratio 1.34 1.31 1.24 1.23 1.23 1.24 1.24 1.29 1.20 1.40 1.54 1.59 1.75 1.91 1.87 1.79 1.63 1.53 1.59 1.48
Cash ratio 0.84 0.89 0.83 0.83 0.71 0.63 0.60 0.54 0.63 0.68 0.85 0.89 1.11 1.22 1.27 1.18 1.17 0.96 0.91 0.81

From the provided data on Powell Industries Inc's liquidity ratios, we can observe the following trends:

1. Current Ratio:
- The current ratio, which measures the company's ability to meet short-term obligations with current assets, was relatively stable over the past five quarters, averaging around 1.75 to 2.50.
- The current ratio generally exceeded 1, indicating that the company had more current assets than current liabilities during the analyzed period. This signifies a healthy short-term financial position.

2. Quick Ratio:
- The quick ratio, often considered a more stringent measure of liquidity as it excludes inventory from current assets, also showed consistency over time, ranging from 1.20 to 1.91.
- The quick ratio stayed above 1 in all quarters, suggesting that the company had an adequate cushion of liquid assets to cover immediate liabilities without relying on selling inventory.

3. Cash Ratio:
- The cash ratio, the most conservative liquidity measure that considers only cash and cash equivalents against current liabilities, displayed more fluctuation compared to the current and quick ratios.
- Despite some quarterly variability, the cash ratio generally remained above 0.50, indicating that Powell Industries Inc held sufficient cash reserves to cover a portion of its short-term obligations.

In summary, Powell Industries Inc maintained a solid liquidity position over the analyzed period, with current, quick, and cash ratios consistently above industry benchmarks. The company's ability to meet short-term obligations and maintain a healthy level of liquid assets suggests a strong financial health in terms of liquidity.

Additional liquidity measure

Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019
Cash conversion cycle days 82.75 69.43 80.18 91.29 111.97 116.23 108.59 110.74 63.30 77.00 65.24 56.93 48.66 53.95 49.68 58.32 45.07 59.64 49.23 59.11

The cash conversion cycle is a critical measure of a company's efficiency in managing its working capital. It provides insights into how long it takes for a company to convert its investments in inventory into cash receipts from customers.

Looking at the historical data for Powell Industries Inc, we observe some fluctuations in the cash conversion cycle over the past few quarters. In the most recent quarter, ending on September 30, 2024, the cash conversion cycle stood at 82.75 days, indicating that it took the company approximately 82.75 days to convert its investments in inventory into cash receipts from customers.

Comparing this figure to previous quarters, we see that the cash conversion cycle has fluctuated between a low of 45.07 days in December 2020 and a high of 116.23 days in June 2023. A lower cash conversion cycle suggests that the company is more efficient in managing its working capital, whereas a higher cycle indicates potential inefficiencies.

Overall, it is essential for Powell Industries Inc to monitor and potentially improve its cash conversion cycle to ensure optimal management of its working capital and enhance its overall financial performance.